The plaintiff must also show that the defendant's
use of that mark “is likely to cause confusion . . . as to the affiliation,
connection, or association of [the defendant] with [the plaintiff], or as to the
origin, sponsorship, or approval of [the defendant's] goods, services, or
commercial activities by [the plaintiff].” 15 U.S.C. § 1125(a)(1)(A).

2. "Use in Commerce"

Courts in the USA are split on the threshold
question of whether the sale and purchase of another's trademark as a keyword
constitutes a commercial use of the mark.

Courts in the Second Circuit have uniformly
held that the use of a trademark in keywords, where the use is strictly internal
and not communicated to the public, does not constitute a Lanham Act "use". See:

The district courts have adopted the reasoning of
1-800 Contacts Inc. v. WhenU.com, 414 F.3d 400 (2d Cir. 2005) (10 ECLR 678,
7/13/05). The court had held that the use of a trademarked term to trigger
browser pop-up advertising was not an actionable use of the mark in commerce: "A
company's internal utilization of a trademark in a way that does no communicate
it to the public is analogous to a individual's private thoughts about a
trademark. Such conduct simply does not violate the Lanham Act, which is
concerned with the use of trademarks in connection with the sale of goods or
services in a manner likely to lead to consumer confusion as to the source of
such goods or services."

Merck &
Co. v. Mediplan Health Consulting Inc., 431 F. Supp. 2d 425 (S.D.N.Y. 2006) (11
ECLR 375, 4/5/06): "In 1-800 Contacts, the Second Circuit emphasized that
commercial use is not the equivalent of “use in commerce” for trademark purposes.
It observed that, “while any number of activities may be ‘in commerce’ or create
a likelihood of confusion, no such activity is actionable under the Lanham Act
absent the ‘use’ of a trademark.” 414 F.3d at 412. Trademark use “ordinarily”
involves placing a trademark on goods or services to indicate that the goods or
services emanate from or are authorized by the owner of the mark. Id. at 408.
Here, in the search engine context, defendants do not “place” the ZOCOR marks on
goods, containers, displays, or associated documents, nor do they use the marks
to indicate source or sponsorship. Rather, the marks are used only in the sense
that a computer user’s search of the keyword “Zocor” will trigger the display of
sponsored links to defendants' websites. This internal use of the keyword “Zocor”
is not use of the mark in the trademark sense; rather, this use is more akin to
the product placement marketing strategy employed in retail stores, where, for
example, a drug store places its generic products alongside similar national
brand products to capitalize on the latter's name recognition. See id. at 411.
The sponsored link marketing strategy is the electronic equivalent of product
placement in a retail store."

The U.S. District Court for the
Western District of Washington (located in the Ninth Circuit) held that the use
of a mark in a clearly marked comparative ad context was "excepted from the
reach of the statute"; Nautilus Group, Inc. v. Icon Health & Fitness, Inc., No.
C-02-2420RSM, 2006 WL 3761367 (W.D. Wash. Dec. 21, 2006)

The U.S. District Court for the Eastern District of Kentucky denied a motion to
dismiss without actually deciding whether the purchase of keywords was a
trademark use, holding merely that the plaintiff's Lanham Act claim was
"plausible". (T.D.I.
Int'l Inc. v. Golf Preservations Inc., E.D. Ky., No. 07-313, 1/31/08)

Buying for the Home v. Humble Abode LLC, D.N.J., No. 03-2783, 10/20/06
("First, the alleged purchase of the keyword was a commercial transaction
that occurred “in commerce,” trading on the value of Plaintiff’s mark.
Second, Defendants’ alleged use was both “in commerce” and “in connection
with any goods or services” in that Plaintiff’s mark was allegedly used to
trigger commercial advertising which included a link to Defendants’
furniture retailing website. Therefore, not only was the alleged use of
Plaintiff’s mark tied to the promotion of Defendants’ goods and retail
services, but the mark was used to provide a computer user with direct
access (i.e., a link) to Defendants’ website through which the user could
make furniture purchases. The Court finds that these allegations clearly
satisfy the Lanham Act’s “use” requirement.")The parties settled their case (LLC,
No. 03-CV-2783 (JAP) (D. N.J.
Stipulation and Order of Settlement filed Feb. 16, 2006).

J.G.
Wentworth v. Settlement Funding LLC, E.D. Pa., No 06-0597, 1/04/07 ("Such
use is not analogous to “an individual’s private thoughts” as defendant
suggest. By establishing an opportunity to reach consumers via alleged
purchase and/or use of a protected trademark, defendant has crossed the line
from internal use to use in commerce under the Lanham Act.")

Even if there is a use in commerce, the use
also must be likely to cause confusion. Likelihood of confusion requires that “‘an
appreciable number of ordinarily prudent purchasers are likely to be misled, or
indeed simply confused, as to the source of the goods in question, or “are likely to believe that the mark’s owner sponsored,
endorsed, or otherwise approved of the defendant’s use of the mark,” Tommy
Hilfiger Licensing, Inc. v. Nature Labs, LLC, 221 F. Supp. 2d 410, 414 (S.D.N.Y.
2002) (citing Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604
F.2d 200, 204-05 (2d Cir. 1979)).

Edina
Realty Inc. v. MLSonline.com, Civ. 04-4371, 2006, WL 737064 (D. Minn. March 20,
2006) (As evidence of confusion Edina Realty offered a handful of e-mails
and phone calls received by MLSonline from consumers inquiring about Edina
Realty: "It is unclear whether the phone calls and emails identified by
plaintiff are evidence of actual consumer confusion caused by defendant’s use of
plaintiff’s mark. A survey that could demonstrate actual confusion is
unnecessary, however, because plaintiff need only show a likelihood of confusion.
The Court determines that the phone calls and emails are sufficient to raise a
genuine issue of material fact for the purposes of summary judgment.")

In a

case, where competetor's trademark was displayed in the ad copy, a
federal court found initial interest confusion as a matter of law, because
the defendant offered no evidence to show a lack of initial interest
confusion and could offer no explanation for why he chose plaintiff's
trademark as an Adword. (Storus
Corp. v. Aroa Marketing Inc., 2008 WL 449835 (N.D. Cal. Feb. 15, 2008))

S & L Vitamins had used Designer Skin’s trademarks
in the metatags and source codes of its websites, and as search-engine keywords,
to inform internet consumers who are searching for Designer Skin’s products that
those products are for sale on S & L Vitamins’ websites. The United States
District Court held that there was no initial interest confusion. It stressed
the fact that S & L Vitamins’ use of Designer Skin’s trademarks accurately
described the contents of its websites: "In contrast to the deceptive conduct that forms
the basis of a finding of initial interest confusion, S & L Vitamins uses
Designer Skin’s marks to truthfully inform internet searchers where they can
find Designer Skin’s products. Rather than deceive customers into visiting their
websites, this use truthfully informs customers of the contents of those sites.
Indeed, in practical effect S & L Vitamins invites Designer Skin’s customers to
purchase Designer Skin’s products. The fact that these customers will have the
opportunity to purchase competing products when they arrive at S & L Vitamins’
sites is irrelevant. The customers searching for Designer Skin’s products find
exactly what they are looking for when they arrive at these sites. S & L
Vitamins is not deceiving consumers in any way. Thus, its use of the marks does
not cause initial interest confusion."

The U.S. District Court for the Eastern District of Wisconsin held that
a company may proceed with a trademark infringement claim against a
company that allegedly resold its products without authorization and
purchased keyword ads containing the trademarked terms.

, Technology & Marketing Law Blog.
Ascentive also claims that Google broke the law when, after a dispute, it
refused to list its web site in the natural search listings any longer and did
no longer allow Ascentive to participate in the AdWords program. Ascentive tried
to persuade Google to revoke the decision, but did not succeed, not even in
gaining the information why Google did this. Two emails from Google only stated:

"Unfortunately, we will not
be reversing our decision regarding the suspension of your account.
Please respect our decision and as noted in our Terms and Conditions,
Google reserves the right to terminate advertisements for any reason."
and "As mentioned in our previous email, your Google AdWords
account has been suspended due to multiple policy disapprovals. We
are unable to revoke your account suspension, and we will not accept
advertisements from you in the future. Please note that our support
team is unable to help you with this issue, and we ask that you do
not contact them about this matter."

American Blind and Wallpaper
Factory filed suit against the search giant and its partners, AOL and Netscape,
in the U.S. District Court for the Southern District of New York on January 27,
2004. American Blind
argues that Google, by selling keyword-based advertising to competing retailers
when Google users search on "American Blind" or "American Blinds"
is violating the company's trademark. Moreover through its AdWords Keyword
Suggestion Tool, Google actively and and deliberately encourages American
Blind's competitors to purchase as keywords both the American Blind marks and
virtually every conceivable, though indistinguishable iteration of those marks (e.g.
an customer who is considering purchasing the keywords "American Blind" is
encouraged also to purchase the keywords "american blinds", "american blinds and
wallpapers"

Early in 2005, the court upheld
American Blind's rights to continue its case on claims of trademark
infringtement, unfair competition, contributory trademark infringement and
contributory dilution. The court did, however, grant Google's motion to throw
out American Blinds' claims of "tortious interference with prospective business
advantage" and enthasized that its ruling expresses no opinion as to whether
American Blind ultimately will prevail on the other claims.

In 2007, U.S. District Court Judge Jeremy
Fogel in San Jose, Calif., refused to completely dismiss the lawsuit. The ruling granted some claims while rejecting others
in Google's motion for summary judgment. "The large number of businesses and
users affected by Google's AdWords program indicates that a significant public
interest exists in determining whether the AdWords program violates trademark
law," Fogel wrote in his decision.

In September 2007, Google finally settled
this long-running trademark infringement lawsuit with American Blind and Wallpaper Factory, which
was scheduled to go to trial in the U.S. District Court for Northern California
in November. Google agreed not to make any changes to its AdWords trademark
policy that would adversely affect American Blind in exchange for the company’s
dropping its claims. The settlement included no payment.

The complaint, filed by
plaintiff Government Employees Insurance Co. (Geico) against defendant search
engine companies Google Inc. and Overture Services Inc. on May 4, 2004 alleges
that defendants by selling the famed "Geico" mark as adword so
that the protected term can appear in sponsored search results, are infringing
on the complainent's trademark. According to the suit, that practice causes
consumer confusion in violation of the Lanham Act, the primary federal law
covering trademark registration and protection. Geico has asked for a
permanent injunction, attorneys' fees and damages.
Geico is seeking nearly nine million dollars in lost profits.

And something for fans
of conspiracy theories: Geico is not only the largest direct marketer of auto
insurances in the United States, which makes it the most high-profile American
company to have filed a complaint against Google over their adwords, but also a
subsidiary of Berkshire Hathaway, the investment company owned by Warren Buffett.
Buffett is rumored to be a good friend of Bill Gates. The start of the search
engine war against Google?

September 3,
2004: Roberts, Paul:
Google
May Face Another Lawsuit, PCWorld:
"A federal judge in Virginia has ruled that a trademark infringement
suit filed by the Government Employees Insurance Co. (GEICO) against
Internet search giants Google and Overture Services can proceed."

May 19, 2004: Olsen,
Stefanie, Geico
sues Google, Overture over trademarks, ZDNet"Auto insurance
company Geico has sued Google and Overture Services for allegedly violating
its trademarks in search-related advertisements, in the latest legal salvo
against the Internet companies."

In
December 2004 Google
Inc. won a significant legal victory when a federal judge
ruled that the search engine's advertising policy does not violate trademark
laws. The ruling was the first in American courts to address whether Google
can sell ads linked to trademarked search terms. According to the judge, "as
a matter of law it is not trademark infringement to use trademarks as
keywords to trigger advertising," This outcome had not been expected
as in late August, the judge had denied Google and Overture's motion to
dismiss six charges brought by Geico and on Nov. 19 had denied Google's
motion for summary judgment. Overture (Yahoo!) had settled out of court with
insurance company Geico earlier in December 2004. Terms of the agreement
were not disclosed.

The judge
still had to rule on another claim by Geico, that Google is liable for
trademark infringement when it lets marketers buy ads that use trademarked
names in the ad copy.

December 15, 2004, Olsen, Stefanie,
Google wins in trademark suit with Geico, CNet:
"Google scored a big legal win Wednesday when a federal judge ruled that
its use of trademarks in keyword advertising is legal."

A
written opinion released 8
August by the US District Court for the
Eastern District of Virginia reiterated and expanded on a verbal opinion from
last December in the Google v. GEICO lawsuit. The Court found that GEICO
failed to produce sufficient evidence to establish that advertisements that do
not reference GEICO’s trademarks in their text or headings violate the Lanham
Act, even though Google’s advertising program enables those ads to appear when a
user searches on GEICO’s trademarks. The Court also held that the use of GEICO’s
trademarks in the heading or text of advertisements that appear when a user
searches on “GEICO” does violate the Lanham Act, leaving as the only remaining
issues in the case whether Google is liable for such violations and, if so, the
measure of damages. The two parties were
directed to try and reach a settlement during the next 30 days. And so they did,
but t

The full text of the complaint
can be found at
http://pub.bna.com/eclr/rescuecom.pdf. It alleges that Google has
improperly infringed upon and diluted Rescuecom Corporation’s name and trademark
“Rescuecom” by selling the trademark “Rescuecom” to Rescuecom Corporation’s
competitors as a keyword so that when an Internet User searches for “Rescuecom”
on defendant Google’s Internet search engine, the competitor’s advertisement
hyperlink will appear on the first page of the search results. Resuecom also
believes that Google's online program “Keyword Suggestion Tool” has
suggested to one or more of Rescuecom Corporation’s competitors that they should
use the Rescuecom trademark as a Keyword for their advertising.

Until April 2004 Google had responded to
complaints by Rescuecom Corporation of trademark violations by removing the
Sponsored Link which used the Rescuecom trademark as a Keyword. After April 2004, Google changed its policy and thereafter refused to
remove or otherwise disable the links.

In 2006 a New York District
Court dismissed the lawsuit.
See:
The ruling (16-page / 1.7MB PDF)

September 29, 2006: Mills, Elinor,
Judge sides with Google in dispute over keywords, CNet:"A federal court on Thursday dismissed a lawsuit against Google over its
practice of allowing companies to buy search-related ads that are displayed when
people type in the name of a competitor."

Another Adwords lawsuit was
filed against Google by JTH Tax on April 4th. In February 2005 the plaintiff
learned that an use of its trademark "Liberty Tax Service" appeared in the title
of the online Google Ad Words ad that directs users to another website called
"Free Advice Center.com", which is a website unrelated to Liberty Tax Service.
Google did not respond to the demand to remove the link. Google's
trademark infringement policy
says that ads containing third party trademarks will be taken down. Why Google
didn't react in this case, remains unclear.

CNG Financial Corp., which owns more than 1,300
Check 'n Go stores in 35 US states, has filed a lawsuit against Google Inc. in
the U.S. District Court in Cincinnati. The payday loans provider wants an order
preventing Google from selling ads linked to the Check 'n Go name.

A Google search for "Check 'n Go" provides 27 "Sponsored
Links" that direct users to websites of Check 'n Go competitors. "Because of the
fame of the Check 'n Go mark, these companies are willing to pay Google
handsomely to have links to their Web sites appear in response to a search of
that mark," the lawsuit says.

February 9, 2006:
Google sued for selling Check 'n Go keyword, The Register:"The company behind US cash-advance firm Check 'n Go has sued Google for selling
its trademarks as keywords in search advertising, according to the Cincinnati
Enquirer."

JP Enterprises -which runs the
online dating service lovecity.com- has sued Yahoo and three other
companies for allegedly paying to have their ads come up when its name is
typed into the Google search page. The lawsuit,
filed in federal district court in Colorado accuses Yahoo and the other
companies of bidding to appear on Google's results pages when users query on
"lovecity" and the related terms "lovecity.com" and "www.lovecity." JP
Enterprises claims that Yahoo and the other companies are violating the JP
Enterprises trademark by using it to trigger ads for their own dating sites,
and seeks punitive damages because, the suit alleges, the sponsored ads
appearing through the AdWords system caused confusion with consumers, hurt
the "lovecity" brand and cost sales.

American Airlines has become the most
high-profile company so far to sue Google over keyword advertising.

By bringing a lawsuit against Google, filed in U.S. District Court for the
Northern District of Texas, Fort Worth Division, the company wants to stop
competitors from using trademarks to trigger their own advertising on Google.

"Without authorization or approval from American Airlines, Google has sold to
third parties the 'right' to use the trademarks and service marks of American Airlines or words, phrases, or terms confusingly similar to those marks as
'keyword' triggers that cause paid advertisements, which google calls 'Sponsored
Links' to appear alongside the 'natural results," the lawsuit said.

The U.S. District Court for
the District of Minnesota held that the use of a rival real estate broker's
trademark as a keyword term, as well as in the text of sponsored links, is not a
fair use of the mark where there are other opinions for describing the market
the defendant serves.

Without lengthy analysis, the
court found that the defendant's purchase of search terms like “Edina Realty,”
“Edina Reality,” “EdinaReality.com,” “EdinaRealty,” “EdinaRealty.com,”
“www.EdinaReality.com” and “www.EdinaRealty.com” on both Google and Yahoo did
constitute use of the plaintiff's mark in commerce. The court held that although
defendant's use was not "conventional," the purchase of terms comprising the
marks, in order to generate sponsored link advertisements, satisfied the
definition of use in commerce as provided in 15 U.S.C. §1127.

The court
briefly evaluated the standard likelihood of confusion factors and found enough
dispute about several factors to require a trial. Edina Realty proffered as
evidence of actual confusion several e-mails received by MLSonline from
consumers inquiring about Edina Realty.

MLSonline also
sought dismissal of the trademark infringement claims advanced against it on the
ground that its use was a permitted nominative fair use:

The Court holds that defendant's use of the Edina Realty mark does not
constitute nominative fair use as a matter of law. Defendant uses the mark
as an Internet search term, in its Sponsored Link advertisements, and in
hidden text and hidden links on its website. None of these uses requires
the Edina Realty mark. In its advertisements and hidden links and hidden
text, defendant could easily describe the contents of its website by stating
that it includes all real estate listings in the Twin Cities. Similarly,
defendant could rely on other search terms, such as Twin Cities real estate,
to generate its advertisement. In addition, defendant's use of the Edina
Realty mark in its advertisement does not reflect the true relationship
between plaintiff and defendant. Defendant's advertisement that has
appeared on Yahoo, for example, places the Edina Realty mark in the headline,
which is underlined and in bold font. The name of defendant's company is
listed in much smaller font at the bottom of the ad. Defendant could have
done more to prevent an improper inference regarding the relationship.

In May 2006, the
case settled. Lawyers representing Edina Realty and TheMLSonline.com confirmed
that a deal has been reached but said its terms were confidential.

In 800-JR Cigar, Inc. v.
GoTo.com, Inc.,et al., the US District Court of New Jersey issued an opinion on
whether the use of a trademark as a "keyword" constitutes trademark infringement
by a search engine. The plaintiff, JR Cigar, is a prominent seller of cigars
at discount prices and the owner of six federal trademarks that utilize the
formative “JR” or “JR Cigar.” The defendant, GoTo is a pay-for-priority Internet
search engine (a search engines that solicits bids from advertisers for key
words or phrases to be used as search terms, giving priority results on searches
for those terms to the highest-paying advertiser) formed in 1997 (now Overture).
Between April 1999 and June 2001, GoTo earned revenue of about $345 from paid
listings for “jr cigar” and related search terms.

The court adopted the reasoning
of Government Employees Insurance Co. v. Google Inc., 330 F. Supp. 2d 700, 73
USPQ2d 1212 (E.D. Va. 2004) and held, among other things, that such sales by a
search engine constitute a "use" of the trademark "in commerce" within the
meaning of federal trademark statutes. According to the court GoTo made use of
JR's trademark in three ways:

• GoTo traded on the value of the marks when it accepted payment by competitors
of JR desiring to pay for prominence in search results.

• GoTo injected itself into the marketplace by placing the advertisers before
the natural search results list, acting as a conduit to steer potential
customers away from JR to JR's competitors.

• GoTo's "Search Term Suggestion Tool" identified which of JR's marks were
effective search terms, and then marketed them to JR's competitors.

The court concluded, however,
that there are disputed issues of fact that preclude a summary judgment ruling
on the issue of direct trademark infringement, in particular the likelihood of
confusion resulting from the sale of trademark terms as keyword search terms.

June 17, 2005: Dickinson,
Casey,
Rescuecom files trademark suit against Google, Business Journal:
"Rescuecom, a computer-repair franchising
company based in Syracuse, has filed suit against Google, Inc. to stop the
search-engine giant from selling the company’s name as a Google keyword."

April 6, 2004:
McCullagh, Declan,
Judge
won't toss out Google, Overture suit:
"A federal judge in New York has rejected requests from Google and
Overture Services to throw out a lawsuit that claims the two search
companies unlawfully sold advertising based on a pet store owner's
registered trademark."

December 5, 2003:
Kuchinskas, Susan:
Google
Asks Judge to Lay Down Trademark Law, internetnews.com:
"Today, Google asked a U.S. district court to rule on whether some of
the keywords it sells to advertisers infringe on the trademarks of American
Blind and Wallpaper Factory."

November 5, 2003:
Sullivan, Danny,
Google
Faces Fight Over Ads & Trademarks In France, Search Engine Watch:
"Days after Google was fined by a French court for selling ads linked
to the terms "travel market" and "airflight market,"
news emerged that Louis Vuitton launched its own trademark-related action
against Google."

October 16, 2003:
McCullagh, Declan,
Google
France fined for trademark violation, ZDNet:
"A French court has ruled against Google France in an intellectual
property dispute, saying the company must pay a fine for allowing
advertisers to tie their text notices to trademarked search terms."

b. Evidence of Confusion
(1) GEICO’s Survey Results
GEICO introduced an expert survey that it
claimed revealed a strong likelihood of
confusion caused by Google’s Adwords program and
the Sponsored Links that the program places
alongside the organic results of searches on the
GEICO trademark.9 The survey was
designed and evaluated by a professor of
marketing at American University’s Kogod School
of Business, who attempted to measure initial
interest confusion experienced by potential
customers10 by asking them to enter
“GEICO” into the Google search engine and then
view a results page that showed five Sponsored
Links alongside the organic listings.11
The survey also tested a “control group,” the
members of which also searched on “GEICO” but
then saw a results page on which the Sponsored
Links had been changed from advertisements for
car insurance quotes, most of which mentioned
GEICO, to advertisements regarding NIKE athletic
apparel. After asking both groups a series of
questions designed to measure the likelihood of
confusion, the professor compared the degree of
confusion demonstrated by those who viewed the
insurance-related Sponsored Links to that
demonstrated by the control group.12

According to the survey results, 67.6% of
test group respondents expected that they would
reach GEICO’s Web site if they clicked on the
Sponsored Links, and 69.5.% thought that the
Sponsored Links were either links to GEICO’s
site or affiliated with GEICO in some way.13
In addition, 20.1% of test group respondents
said that to purchase GEICO insurance they would
click first on one of the Sponsored Links.14
From these results, the professor
concluded that a substantial percentage of
potential GEICO customers perceived the
Sponsored Links as being
associated with GEICO and therefore were
confused about whether they could get GEICO
information or rate quotes from those links.

(2) Survey Weaknesses
The Court found that defendant’s cross
examination of the professor revealed a number
of weaknesses in GEICO’s survey evidence. First,
the control did not successfully demonstrate the
source of the test group’s confusion. As the
survey expert admitted, an effective control
should have removed from the page viewed by the
test group the allegedly infringing elements for
which GEICO wanted to measure confusion, such as
the Sponsored
Links mentioning GEICO, while keeping the other
elements as constant as possible. This would
have allowed the evaluator to subtract any
degree of confusion expressed by the control
group from that expressed by the test group,
with the resulting difference representing the
confusion attributable to the eliminated
elements–-similar to the manner in which medical
researchers subtract out the “placebo effect” of
a drug or procedure under examination. However,
the survey’s control, which replaced the
insurance-related Sponsored Links that appeared
when respondents searched on “GEICO” with
Sponsored links related to NIKE athletic apparel,
did not function as an accurate measure of the
confusion caused by non-infringing elements of
the screen shot. As a threshold matter, the
control retained the use of “GEICO” as a
keyword, which itself was alleged to be a source
of confusion. Further, instead of removing only
the references to GEICO in the Sponsored Links,
which would have measured whether the use of the
trademarked keyword to place relevant Sponsored
Links or the appearance of the mark in the ads
was responsible for respondents’ confusion, the
survey removed all references to car insurance
and replaced them with clearly unrelated NIKE
ads. Thus, the control did not reveal which
aspects of the insurance-related Sponsored Links
caused respondents’ confusion–-the use of
GEICO’s mark in the ads or the ads’ mere
reference to insurance.15 By not
examining this more subtle distinction, the
survey did not produce evidence that the use of
“GEICO” as a keyword, without more, causes
respondents to be confused by the appearance of
the Sponsored Links.
Second, the survey design introduced “demand
effects” and “order effects” that could have
tainted respondents’ answers that appeared to
indicate confusion. A demand effect results when
th interviewer’s questions or other elements of
the survey design influence participants’
responses by suggesting what the “correct”
answers might be or by implying associations
that might not otherwise occur to participants.
An order effect results when a participant’s
answer to one question affects his answers to
subsequent questions. For obvious reasons, both
effects can significantly bias the survey
results. In this instance, as noted above, the
interviewers repeatedly questioned respondents
about their behavior and assumptions with regard
to GEICO and obtaining GEICO quotes. Responses
to subsequent questions, such as whether the
participant thought the Sponsored Links were
affiliated with any company, easily could have
been influenced by the earlier questions about
GEICO, making the participant more likely to
assume that “GEICO” was the right answer or what
the interviewer wanted to hear. This demand
effect, along with the order effect, also
undercut the assessment of confusion regarding
the one insurance-related Sponsored Link shown
to the test group that did not mention GEICO’s
mark in its heading or text. Of the five
Sponsored Links listed, only the last one did
not refer to GEICO in its heading or text. By
the time respondents considered this ad, they
had already seen the four others that did
contain the GEICO mark, calling into question
whether they would have expressed similar
confusion if faced only with insurance-related
ads that appeared next to the organic results
for “GEICO” but did not mention the mark itself.
Third, discrepancies between the Web page
selected to be shown to the survey particpants
and the actual pages users are likely to see
when searching on “GEICO” further weakened the
reliability of the results. As discussed above,
the page chosen included more Sponsored Links
than the average Google results page. In
addition, and possibly more important to an
accurate assessment of users’ confusion, the
overall appearance of the outdated screen shot
shown to survey participants differed markedly
from the Google results page that a user would
encounter in running a real search. Most
notable, in the survey shot, the Sponsored Links
were closer on the page to the organic listings
than on Google’s actual search results pages.16
In the Court’s view, the proximity of the
Sponsored Links in the survey page increased
confusion regarding the difference between the
two lists of links and was suggestive of
affiliations between the organic listings and
the Sponsored Links. Especially when considered
along with the other weaknesses in the survey,
these differences give the Court serious doubts
about the accuracy of the survey results’
reflection of actual users’ experiences with and
reactions to the Sponsored Links.

c. Conclusions from Evidence of
Confusion
Based on the above analysis, the Court finds
that plaintiff has failed to establish a
likelihood of confusion stemming from Google’s
use of GEICO’s trademark as a keyword and has
not produced sufficient evidence to proceed on
the question of whether the Sponsored Links that
do not reference GEICO’s marks in their headings
or text create a sufficient likelihood of
confusion to violate either the Lanham Act or
Virginia common law. Despite the many flaws in
its design, the survey’s results were sufficient
to establish a likelihood of confusion regarding
those Sponsored Links in which the trademark
GEICO appears either in the heading or text of
the ad. Based on this finding, Google may be
liable for trademark infringement for the time
period before it began blocking such usage or
for such ads that have slipped or continue to
slip through Google’s system for blocking the
appearance of GEICO’s mark in Sponsored Links.
For, despite the flaws in the survey, the
extremely high percentages of respondents who
experienced some degree of confusion when
viewing such ads provides sufficient evidence to
survive defendant’s Motion for Judgment.
Further, having been advised by defendant that
it has no evidence to introduce on this last
issue, the Court finds that plaintiff has
established a likelihood of confusion, and
therefore a violation of the Lanham Act, solely
with regard to those Sponsored Links that use
GEICO’s trademarks in their headings or text.

6. Update 2009

Second Circuit
decision on "Use in Commerce"

In a long awaited
decision, the Second Circuit reversed a lower court’s
dismissal of a case brought by Rescuecom against Google.
Rescuecom alleged trademark violation, because Google -
through its Keyword Suggestion Tool - had recommended that a
Rescuecom competitor use Rescuecom’s trademark as a keyword.
The district court had dismissed the case, accepting
Google’s argument that its use of Rescuecom’s trademark was
internal and not an infringing “use in commerce.”

So far every single
district court outside of the 2nd Circuit found that the
purchasing of a competitor’s keyword to trigger ads at least
constitutes "use in commerce". Every district court in the
2nd Circuit found otherwise, believing this opinion was
compelled by the Second Circuits holding in 1-800 Contacts,
Inc. v. WhenU.com, Inc., 414 F.3d 400 (2d Cir.192005)
(“1-800”). But the 2nd Circuit found these cases to be
materially different. In 1-800, the search term that was
alleged to trigger the pop-up ad was the plaintiff’s website
address, not its mark. Also, the advertiser could not
purchase keywords to trigger their ads. Instead they could
only choose a category. Google on the contrary, had
recommended its advertisers the Rescuecom trademark through
its Keyword Suggestion Tool and sold it as a keyword.

The case is now
going back to the trial court. Rescuecom still has to prove
that Google's use of the trademark in its AdWords program
causes likelihood of confusion or mistake.

Hearts on Fire Co. v Blue Nile, Inc.,
2009 WL 794482 (D. Mass. March 27, 2009). The
court determined that the purchase of a trademark
constitutes a use in commerce under the Lanham Act and
created a multifactor test for assessing likelihood of
confusion in the context of sponsored ads: "In
addition to these familiar factors, under the
circumstances here, the likelihood of confusion will
ultimately turn on what the consumer saw on the screen
and reasonably believed,given the context. This content
and context includes: (1) the overall mechanics of
web-browsing and internet navigation, in which a
consumer can easily reverse course; (2) the mechanics of
the specific consumer search at issue; (3) the content
of the search results webpage that was displayed,
including the content of the sponsored link itself; (4)
downstream content on the Defendant's linked website
likely to compound any confusion; (5) the web-savvy and
sophistication of the Plaintiff's potential customers;
(6) the specific context of a consumer who has
deliberately searched for trademarked diamonds only to
find a sponsored link to a diamond retailer; and, in
light of the foregoing factors, (7) the duration of any
resulting confusion. This list is not exhaustive, but it
identifies what the Court views as the most relevant
elements to showing a likelihood of confusion in this
case."
For more information see: Goldman,Catching Up on Three Keyword
Advertising Cases--Hearts on Fire, Romeo & Juliette, AAA,
Technology & Marketing Law Blog and Gile,Massachusetts District Court Finds
Keyword Purchase Constitutes Trademark Use